Oman Air: “the challenge of being first”

Peter Hill, Oman Air CEO

Oman Air is quietly working wonders. From a standing start in 2007, when Oman pulled out of the then-multicountry Gulf Air to focus on developing its own national carrier, the airline has gained a reputation for excellence, even while facing down competition from the ‘big three’ Gulf carriers, Emirates, Etihad and Qatar Airways. Peter Hill, appointed CEO in 2008, was one of the original founders of Emirates in the 1980s and previously ran Sri Lankan Airlines. He spoke to me on 9 November 2010 at World Travel Market in London; below are edited extracts of the interview.

Matthew Teller: What makes Oman Air unique?

Peter Hill: That is aligned to what makes Oman unique. We look after the travel needs of Oman from an outbound perspective, and provide nonstop, point-to-point air service. The government is looking to attract overseas business and leisure to the unique destination that is Oman, and we are working with the tourist board to make the world aware of what Oman has to offer.

Oman doesn’t have the glitz and glamour of man-made cities in this region. The national qualities of the country are [very special] – nature, peace and solitude. It’s a vast country which doesn’t have millions of people. It’s very relaxed. In Oman there is space, without the buzz of traffic.

But Oman is not as well known as it could be. We, as an airline, are working for 10-15 years ahead: we’re not going to be a global carrier, but we are aiming to become a significant player in the regional network and on routes from Europe, the Far East and Africa. There is plenty of capacity in the market.

MT: All of this is focused on drawing traffic into Oman. Is there any focus on developing a market for outbound travel from Oman?

PH: Abs0lutely. To give one example, many Omanis are buying second homes in Malaysia – the Malaysian government has set up tax breaks, made buying property an attractive option, with particular appeal to the Gulf market. Malaysia is a Muslim country, where many people speak Arabic and English – it’s an attractive option for many people. We are now codesharing with Malaysia Airlines, and seeing a lot of interest in our Muscat-KL route.

MT: Over the last year or so there’s been a series of announcements about Oman Air innovations, from the “most luxurious toilet” to onboard wifi. At a time when the industry is under great pressure, and carriers around the world are examining every element of cost in detail, why is Oman Air choosing to invest so heavily in passenger comfort?

PH: We were a late starter. Now we are competing directly with other Gulf carriers, who have set such high standards. If we will be able to make any penetration at all, we have to look at different ways of doing things. We can leverage value by doing it well – and that means improving service and experience.

I think we’re refreshing to travel with. We’ve invested hugely in interiors, in developing cuisines with imagination, a choice of wines. We offer 34-inch pitch in economy, wifi on board, you can use your mobile phone as normal once the plane reaches 10,000 feet, there’s video on demand in all classes – even live TV from BBC World, Al Jazeera, Bloomberg… It’s the challenge of being first. Someone needs to set the trend.

The sorts of complaints coming from legacy carriers in Europe – I just wonder, are these sour grapes? Are they crying because their lack of investment has simply left them uncompetitive, in comparison with Gulf carriers? People vote with their wallet. If an airline is offering pneumatic earphones, or electric headphones with an old drop-down screen, as against our technology for the same price, who are you going to go with?

We see this investment as part of the government’s plan to put infrastructure in place that will serve Oman into the future.

MT: Is Oman Air meeting national targets for Omanisation?

PH: Well, the goal is 100% Omanisation! It is understood within the airline that expats are in place to impart our knowledge and then move on. If you discount the flight crew and cabin crew, then we are currently 68% Omani. If you add in the onboard crews that figure is around 63%. Compare that with some of our regional competitors, where the equivalent figure might be 6.3% rather than 63%.

Our senior management team of ten currently includes four Omani nationals. Among pilots, the proportion is roughly 50-50. Among cabin crew it’s nearer 30-70, though all our male cabin staff are Omani.

The key is in the social changes within Oman over the last couple of years. As the image of the airline improves nationally – and internationally – so parents will increasingly view a career in Oman Air, in whichever field, as a good choice for their sons and daughters, when that may not have been the case previously.

MT: When I tweeted about this interview this morning, several people expressed interest, including Arun Rajagopal, a social media manager in Dubai, who asked me to ask you when you expect Oman Air’s Boeing 787 aircraft to be delivered and if Oman Air has any more 737 deliveries to come. That ties into a question about social media in general – what is Oman Air’s strategy for developing a presence in social media?

PH: First, to answer Arun’s question, we have six 787s on order. Boeing-willing, we will get the first of those in the first half of 2014, then two in 2016, then two in 2018. For 737s, we have an order for six, which are due for delivery in 2013 – and, in addition, we have two Embraer jets due for delivery in March/April of next year [2011], to service new domestic and regional routes.

As far as the airline’s social media strategy, well, that is in its infancy. We’ve had a lot on our plate over the last 12 to 18 months, putting in core investment, but you will see our social media presence develop over the next year.

MT: As a final question, where do you see Oman Air in five years, and ten years?

PH: I want to see Oman Air being the preferred way to travel to or from Oman – the carrier of choice. We have 23 aircraft today; in five years that will grow to 28 or 30 aircraft, and in ten years to 36 or 38. We will be aiming for a maximum of only around 50 aircraft in total, in a mix of wide-bodied and single-aisled. I don’t see us bigger than that. We want to become a major player in the region, and a significant carrier to certain global destinations which have a pre-existing relationship with Oman, both in business and leisure.